Stratasys(SSYS)2023-11-15 16:00Financial Performance - Total assets decreased from $1,259.79 million in December 2022 to $1,181.765 million in September 2023[4][5] - Cash and cash equivalents decreased from $150.47 million in December 2022 to $104.563 million in September 2023[4] - Revenues for the three months ended September 30, 2023, were $162.133 million, compared to $162.192 million in the same period in 2022[8] - Net loss for the three months ended September 30, 2023, was $47.279 million, compared to a net income of $18.749 million in the same period in 2022[8] - Gross profit for the three months ended September 30, 2023, was $65.649 million, down from $70.749 million in the same period in 2022[8] - Operating loss for the three months ended September 30, 2023, was $42.798 million, compared to an operating loss of $15.626 million in the same period in 2022[8] - Net loss per share for the three months ended September 30, 2023, was $0.68, compared to earnings per share of $0.28 in the same period in 2022[8] - Comprehensive loss for the three months ended September 30, 2023, was $47.566 million, compared to a comprehensive income of $17.88 million in the same period in 2022[8] - Net loss for the nine months ended September 30, 2023, was $108.118 million, compared to $26.584 million for the same period in 2022[13] - Comprehensive loss for the nine months ended September 30, 2023, was $47.566 million, compared to a comprehensive income of $17.880 million in 2022[9][11] - Net loss per share for Q3 2023 was $(0.68), compared to $0.28 in Q3 2022, and for the nine months ended September 30, 2023, it was $(1.58), compared to $(0.40) in the same period of 2022[53] Expenses and Costs - Research and development expenses for the three months ended September 30, 2023, were $23.567 million, slightly up from $23.145 million in the same period in 2022[8] - Selling, general, and administrative expenses for the three months ended September 30, 2023, were $84.88 million, up from $63.23 million in the same period in 2022[8] - Stock-based compensation for the nine months ended September 30, 2023, was $23.744 million, slightly lower than $24.755 million in 2022[13] - Stock-based compensation expenses for Q3 2023 were $7.5 million, compared to $7.4 million in Q3 2022, and for the nine months ended September 30, 2023, they were $23.7 million, compared to $24.8 million in the same period of 2022[66] - The Company recorded restructuring charges of $18.4 million during the nine months ended September 30, 2023, including $12.0 million under Cost of sales[31] Cash Flows and Liquidity - Cash flows from operating activities resulted in a net cash used of $53.912 million for the nine months ended September 30, 2023, compared to $57.289 million in 2022[13] - Cash flows from investing activities provided $10.845 million in 2023, a significant improvement from a net cash used of $23.987 million in 2022[13] - Cash flows from financing activities used $1.084 million in 2023, slightly lower than $1.407 million in 2022[13] - Cash, cash equivalents, and restricted cash at the end of September 30, 2023, were $104.832 million, down from $150.823 million at the end of September 30, 2022[13] Equity and Investments - Total equity as of September 30, 2023, was $883.143 million, down from $948.726 million as of September 30, 2022[9][11] - Accumulated deficit as of September 30, 2023, was $2.18497 billion, compared to $2.074462 billion as of September 30, 2022[9][11] - Stock-based compensation plans issued 1,017 shares in 2023, compared to 731 shares in 2022[9][11] - Stratasys completed the merger of MakerBot with Ultimaker, recording a net gain of $39.1 million from the deconsolidation of MakerBot[19][20] - The Company recognized an equity method investment in Ultimaker totaling $105.4 million, representing a 46.5% share in the new entity[20] - As of September 30, 2023, the equity investment in Ultimaker amounted to $88.4 million, down from $100.2 million at December 31, 2022[21] - Stratasys acquired Covestro AG's additive manufacturing materials business for a total consideration of $59.7 million, including $53.8 million in cash payments and $5.2 million in ordinary shares[23][24] - The Covestro acquisition included intangible assets valued at $21.5 million and goodwill of $20.2 million[27] - Goodwill as of September 30, 2023 was $90.2 million, an increase from $65.0 million as of January 1, 2023, primarily due to acquisitions[48] Revenue Breakdown - Total revenues for the three months ended September 30, 2023 were $162.1 million, compared to $162.2 million in the same period in 2022[39] - Total revenues for the nine months ended September 30, 2023 were $471.3 million, compared to $492.2 million in the same period in 2022[39] - Americas region revenues for the three months ended September 30, 2023 were $101.8 million, a decrease from $107.5 million in the same period in 2022[39] - EMEA region revenues for the three months ended September 30, 2023 were $40.6 million, an increase from $31.5 million in the same period in 2022[39] - Asia Pacific region revenues for the three months ended September 30, 2023 were $19.7 million, a decrease from $23.3 million in the same period in 2022[39] - Revenues recognized at a point in time for the three months ended September 30, 2023 were $126.6 million, compared to $125.7 million in the same period in 2022[40] - Revenues recognized over time for the three months ended September 30, 2023 were $35.6 million, compared to $36.5 million in the same period in 2022[40] - Deferred revenue as of September 30, 2023 was $80.3 million, compared to $75.4 million as of December 31, 2022[42] - Remaining Performance Obligations (RPO) as of September 30, 2023 amounted to $93.5 million, with $61.8 million expected to be recognized in the next 12 months[43] Legal and Strategic Matters - Stratasys terminated its merger agreement with Desktop Metal, incurring a $10.0 million termination fee[33] - Nano Dimension launched a hostile tender offer for Stratasys shares, ultimately offering $25.00 per share, but the offer expired without completion[34] - 3D Systems made multiple merger proposals to Stratasys, with the final offer being $7.00 in cash and 1.6387 newly issued shares of 3D Systems per Stratasys share[36] - Stratasys initiated a strategic alternatives process following the termination of the Desktop Metal merger agreement[37] - The Rights Plan expiration date was extended through December 31, 2023, to protect shareholder interests and prevent unauthorized control accumulation[72] - Nano Dimension filed a lawsuit against the company on April 25, 2023, challenging the legality of the Rights Plan, which remains unresolved as of November 15, 2023[73][75] Stock-Based Compensation and Equity - As of September 30, 2023, the company had 1,358,721 stock options outstanding with a weighted average exercise price of $21.03[67] - Unrecognized compensation cost related to unvested stock options was $2.5 million as of September 30, 2023, expected to be recognized over 2.4 years[67] - The unrecognized compensation cost related to unvested RSUs and PSUs as of September 30, 2023, is $51.26 million, expected to be recognized over a weighted-average period of 2.52 years[69] - The weighted average grant date fair value of RSUs and PSUs as of September 30, 2023, is $18.71[69] - The total accumulated other comprehensive loss as of September 30, 2023, is $12.958 million, compared to $14.223 million as of September 30, 2022[70] Foreign Exchange and Hedging - Foreign exchange forward contracts not designated as hedging instruments had a notional amount of $57.2 million as of September 30, 2023, with gains of $1.3 million and $2.6 million recognized for the three and nine months ended September 30, 2023, respectively[61] - The company had $51.6 million in foreign exchange forward contracts designated as cash flow hedges for payroll and operating expenses denominated in NIS as of September 30, 2023[62] - Foreign exchange forward contracts designated as cash flow hedges for revenue included $20.0 million Euro to be converted into U.S. dollars as of September 30, 2023[63] Tax and Geographic Impact - The company's effective tax rate as of September 30, 2023, was impacted by geographic earnings mix, valuation allowance movements, and uncertain tax positions[56] Operational and Regional Impact - The company's manufacturing facility and global headquarters in Israel remain largely unaffected by the ongoing war as of the financial statement date[79]